S&P BSE Smallcap index was down 2.19% or 232 points at 10,355, also its 52-week lows, compared to a 0.64% decline in the S&P BSE Sensex at 25,577 points.

In the past two trading sessions, the smallcap index has tanked 11% against a 6.5% fall in the benchmark index.

Lifeline Drugs & Pharma, JBF Industries, Stampede Capital, Himatsingka Seide, Gold Line International Finvest, Nilkamal, Vakrangee and Shilpa Medicare are some smallcap stocks that have fallen more than 10% each. Most of these stocks had outperformed the market in the past one and half months.

About 122 stocks out of 571 companies from the BSE smallcap index have hit 52-week lows on the BSE.

The list include D B Realty, Engineers India, Financial Technologies, Just Dial, MOIL, Rallis India, VIP Industries and VST Industries.

Meanwhile, Moody's Investor's Service says that India's Baa3 government bond rating incorporates the strong growth potential of its large and diverse economy as well as the government's high fiscal deficits and regulatory and infrastructure constraints on competitiveness.

Noting that in addition to lower oil prices, tighter fiscal and monetary policies have also helped restore India's macro-economic balance over the last two years, Moody's highlights that this improved balance offers the Indian economy and financial system some resilience to potential volatility in global capital flows in coming months, the rating agency said in a report.